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Anyone care that Republic actually out-bid Southwest?

FlyinPiker

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Yeah FAPA acted like scumbags over the last few days, but does anyone care about the fact that Southwest actually got out-bid in all of this?

Republic Tops Southwest's Bid


Republic Airways Holdings Inc. is set to acquire Denver-based discount carrier Frontier Airlines Holdings Inc. after Republic's bid was selected over Southwest Airlines Co. at a bankruptcy-court auction Thursday.
The result represents a victory of David and Goliath proportions for Indianapolis-based Republic, a holding company for regional airlines that is about a 10th the size of Dallas-based Southwest, the country's dominant low-fare carrier measured by revenue.
The win comes after Republic agreed to sweeten its offer for Frontier and Southwest was unable to secure quick union approval from pilots for the proposed tie-up.
Southwest appeared to have the inside track for Frontier after submitting a $170 million bid on Monday. That bid topped an earlier offer of $108.75 million by Republic, which is Frontier's largest unsecured creditor.


But Frontier said late Thursday that Republic ultimately offered "the highest and best bid" after waiving distributions on its original $150 million unsecured claim.
Republic said in a separate statement that it agreed to acquire 100% of Frontier's stock upon its emergence from bankruptcy for $108.75 million, in addition to waiving recovery rights. It plans to run Frontier as a separate subsidiary and maintain Frontier's brand.
Frontier, which entered bankruptcy protection in April 2008, has a fleet of 51 airplanes and flies to 59 destinations in the U.S., Mexico and Costa Rica. Despite its debt woes, the carrier has posted operating profits in each of the last eight months and is the No. 2 carrier in Denver measured by passenger traffic.
Republic operates 228 airplanes and offers flights to 98 destinations through service agreements with several larger airlines. It posted $320 million in revenue in the second quarter and eked out a small profit, unlike many big carriers.
It sees the acquisition as helping it diversify beyond its current business model as a subcontractor to big airlines. Profits have shrunk as major airlines cut their rates and reduce the number of regional airplanes they want in their service.
Last month, Republic acquired ailing Midwest Air Group Inc., a small Milwaukee carrier, from private equity group TPG for $31 million. It also has bought a small airline that plies inter-island routes in Hawaii.
Frontier said it had $379.3 million in secured debt and $92 million in unsecured debt at the end of March.
Southwest is eager to secure new sources of growth amid a stiff recession. After nearly four decades of rapid expansion, its revenue shrank 7.9% to $4.97 billion in the first half of 2009 from the year before.
Acquiring Frontier would have allowed Southwest to more than double its share of passengers at Denver International Airport to nearly 40%, behind only UAL Corp.'s United Airlines. Southwest also would have secured its first international routes, taking over Frontier flights to Mexico and Costa Rica.
But Southwest's bid fell apart after its pilots failed to reach a quick agreement with counterparts at Frontier over seniority, which affects pay and job protections. Southwest had said Monday that any takeover was contingent on such a pact.
"We chose not to amend our bid to remove the labor requirement, a key reason our bid was not selected," Gary Kelly, Southwest's chief executive, said in a statement Thursday.
Southwest's bid also would have been contingent on approval from antitrust regulators in an uncertain process that management has acknowledged could have taken months. Republic already has received antitrust clearance.
Southwest has taken other measures in recent months to boost revenue. It recently began flying to Minneapolis/St. Paul and New York's LaGuardia Airport, adding to the more than 60 U.S. cities it serves.
It will begin service to Boston's Logan Airport on Sunday and start flying to Milwaukee in November.
In May, Southwest also began allowing passengers to bring pets aboard for a fee, introduced a charge for unaccompanied minors and doubled the fee for checking in a third or overweight bag.
Management has signaled it might start charging passengers to check in their first and second bags.
 

scarlet

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No- Republic should Thank Delta and UsAir and United and CAL,,, for all that money they paid them. Now they can compete with them and undercut them even more.

Lets see JB payrates Republic??????
 

SFR

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No, I don't care.
 

FlyinPiker

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No- Republic should Thank Delta and UsAir and United and CAL,,, for all that money they paid them. Now they can compete with them and undercut them even more.

Lets see JB payrates Republic??????

I agree. Just making the point that everything seems to think Frontier's pilots had a say in all of this.

FAPA didn't do anything to help things, but $$$ talks.
 

FlyinPiker

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Did FAPA pilots have a say in this?

I have no idea...doesn't sound like it does it.

That's how things work in bankruptcy sometimes unfortunately, but it seemed like it happened with their union leaderships blessing with no communication. That sucks.

BD, I think we are actually in agreement that the pilot group got rat f.ucked on this deal.
 
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Tristar

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No- Republic should Thank Delta and UsAir and United and CAL,,, for all that money they paid them. Now they can compete with them and undercut them even more.

Lets see JB payrates Republic??????

Perhaps they shouldn't have ever let the SCOPE cat out of the bag, now the chickens are coming home to roost.
 

General Lee

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Perhaps they shouldn't have ever let the SCOPE cat out of the bag, now the chickens are coming home to roost.

Huh? They can't just do anything they want. Anyway, they are feed, and their contracts will eventually come to an end, and our scope clause still keeps them in check. Right now I just want to see what Republic does in DEN with F9, and how they try to slam SWA. It should be FANTASTIC to watch.


Bye Bye--General Lee
 

MILF Hunter

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Huh? They can't just do anything they want. Anyway, they are feed, and their contracts will eventually come to an end, and our scope clause still keeps them in check. Right now I just want to see what Republic does in DEN with F9, and how they try to slam SWA. It should be FANTASTIC to watch.


Bye Bye--General Lee

General all those pay cuts you have taken over the years caused this. Next time use some lube on yourself. Your turning into a bitter old man.
 

Cornelius

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Flyinpiker,

Who do you fly for? I'm guessin WN, so you should be careful calling other unions names and what not. Plus it makes you seem kinda like an idiot.
 

General Lee

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General all those pay cuts you have taken over the years caused this. Next time use some lube on yourself. Your turning into a bitter old man.

We were a fixed cost. They knew what we cost at all times. Those paycuts came with a BK judge watching. Not much anyone can do when that happens. And, I am not an old man---rather a "middle aged man..."


Bye Bye--General Lee
 

Bake

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General Lee, you are in your mid 20's at best, not middle aged. Your posts more than show your maturity.
 

The Victors

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No and they weren't "out bid". RAH trashed a $150 million IOU. Seriously, they said "No Thanks" to $150 million and the creditors said "Sweet, Thanks"! Next is the outcome of that decision.
 

Tristar

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Huh? They can't just do anything they want. Anyway, they are feed, and their contracts will eventually come to an end, and our scope clause still keeps them in check. Right now I just want to see what Republic does in DEN with F9, and how they try to slam SWA. It should be FANTASTIC to watch.


Bye Bye--General Lee

Let me spell it out for you.

You (perhaps not you personally, but Delta in particular, as well as other majors) NEVER should have permitted ANY branded flying to be done by ANYONE other than a pilot on the Delta (insert appropriate airline) seniority list. Your (again, perhaps not yours personally) shortsightedness is largely to blame for the myriad of problems with this industry today.

Twenty years ago I was in college and reading ALPA magazine and SCOPE was a topic then. I remember telling people then that SCOPE'ing out flying was a bad idea. I believe history has proven me to be correct. Most of this (and certainly the inception) was NOT done under the pressure of bankruptcy. Your scope clause keeps them in check with respect to Delta flying (for now), but all of that flying should be performed by Delta pilots earning Delta pay. I can't believe I actually need to explain this to you.

Management has used the availability of regionals to drag down cost of pilots, and it's been allowed to continually happen, so in fact management HAS done just about whatever they want (granted, not what you were implying, but nonetheless true). Now in this case the servant is in effect trying to become the master, the outcome of which we can only speculate at this point - but who is the low-cost provider in the market? For the monent they are feed, but it appears they are trying to alter that paradigm, and it's been the progressive and continual sell out of SCOPE that has made it possible. Welcome to the world you've created.
 

GoodTimes

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Let me spell it out for you.

You (perhaps not you personally, but Delta in particular, as well as other majors) NEVER should have permitted ANY branded flying to be done by ANYONE other than a pilot on the Delta (insert appropriate airline) seniority list. Your (again, perhaps not yours personally) shortsightedness is largely to blame for the myriad of problems with this industry today.

Twenty years ago I was in college and reading ALPA magazine and SCOPE was a topic then. I remember telling people then that SCOPE'ing out flying was a bad idea. I believe history has proven me to be correct. Most of this (and certainly the inception) was NOT done under the pressure of bankruptcy. Your scope clause keeps them in check with respect to Delta flying (for now), but all of that flying should be performed by Delta pilots earning Delta pay. I can't believe I actually need to explain this to you.

Management has used the availability of regionals to drag down cost of pilots, and it's been allowed to continually happen, so in fact management HAS done just about whatever they want (granted, not what you were implying, but nonetheless true). Now in this case the servant is in effect trying to become the master, the outcome of which we can only speculate at this point - but who is the low-cost provider in the market? For the monent they are feed, but it appears they are trying to alter that paradigm, and it's been the progressive and continual sell out of SCOPE that has made it possible. Welcome to the world you've created.


Well said, Tristar.
 

Cometman

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I agree, regional flying should be done by the airline and not farmed out. SWA said that any flying will be done by SWAPA pilots. That is what the other Majors should be doing. That would end the regional problems. Should there be a lower pay scale for the RJ's and Q400's etc? Yes, base it on the size just like they do now. However, there needs to be a strong scope on the flying to prevent management from moving flying from the mainline to the samller aircraft. That can be done by either limiting the market pairs, the mileage, or both. Forget the number of seats, just the markets or mileage.

Now, on the F9 situation. It is apparent that Republic had an agreement with FAPA prior to the SWA bid. They were both creditors and Republic did not want SWA to get the deal. During the talks between FAPA and SWAPA FAPA wanted one list from the top down with 1 for X number, base lock forever, pay freeze, and $3000 a month for furlough pay plus $1000 for insurance for all furlough guys forever. Well, that is something that was never attainable and they knew it. It was apparent they did not want this to go through. Good luck to FAPA, I hope the decision was a good one down the road.
 

FlyinPiker

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Flyinpiker,

Who do you fly for? I'm guessin WN, so you should be careful calling other unions names and what not. Plus it makes you seem kinda like an idiot.

Don't fly for either company.

You make a good point. The only story we seem to be getting is the one the Southwest pilots would like us to believe.

They are stating that everything they have said, heard, etc are undisputed facts...they are wrong on a few things they are currently advertising (devil is in the details or lack there of). My Frontier buddies have set me straight on a few of the things that were/weren't being offered.

Of course don't tell a SWA pilot that.

I can't edit my post, but I do apologize for flaming FAPA. All because we at Flight Info aren't hearing from them doesn't mean their membership isn't.

I do know that the membership has received information that they are not privyed to share with the rest of us at this point.

We should all just let them go about their business and stop worrying about something that's done and over with.

I'm done posting on anything to do with WN+F9.

Looking forward to F9's future success.
 

FlyinGuy

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Who cares what is posted on this board. As a SWA dude, I could care less about what you believe. I don't try to convince anyone of something that they have the brains to figure out themselves. I will say good luck to the F9ers, but I will also say that I think this was set up weeks ago.
 

E2LSO

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As a swa guy I would like to point out that this threads title is the valid point. We, as pilots, would like to believe that the we cause it all to happen or fail but Republic brought more cash. A lot more. Of the 178 million of what we bid 40 was to terminate leases on aircraft, bringing the cash we were going to put in at 130 and change. Republic did not have that stipulation, to my understanding, ergo their bid was quite a bit more attractive. So we should probably not be arguing if SWAPA pilots are arrogant, or if FAPA threw their FOs under a bus. The real question is if Republic overpaid for the assets. And whereas many people on this forum will have opinions on that topic right now, how F9 and Republic are doing in twelve months time will be the final say. Hopefully everyone made the right choice for their employee groups.
 

roughneck

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The reality is that we bid $170 million and some of that went to things like terminating leases, etc. Republic released their claim on the $150 and it would have caused us to bid much higher than the offered $170M and frankly F9 just wasn't worth it.

They brought some good stuff to the table of which the main thing was gates in Denver. They also brought a ton of baggage which ultimately made it not worth bidding more. They had nothing that SWA couldn't have without the baggage in a few months anyway. (Think United divestatures)

We wanted gates in Denver. Money says we get 20+ gates in Denver without this deal. I'll leave it at that and watch the speculation run wild.

We have $2+Billion in the bank. We didn't get out manuvered or out bid by Republic, we let them have F9. RAH has very little operating capital after F9 and Midwest and they are going to be in for a heck of a fight. Good luck to all involved.

It's on in Denver. Should be fun.
 
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